From 96% holding to a sliver: How Gensol promoters made swift exit

When Gensol Engineering made its public market debut through a small and medium enterprises (SME) initial public offering (IPO) in September 2019, its promoters held a commanding 96 per cent stake.

- SAMIE MODAK

Now, that figure has shrunk to a "negligible" fraction.

According to an order by the Securities and Exchange Board of India (Sebi), this steep decline was not organic but allegedly orchestrated through a network of false disclosures, sham transactions, and diverted funds, which effectively led to a near-total promoter exit, even as unsuspecting investors were left holding the bag.

The company's ₹18 crore IPO had seen modest demand, having been subscribed 1.3 times with total bids of ₹23 crore. After listing, the promoters' holding dropped to 70.72 per cent. In July 2023, Gensol - in the business of providing solar consulting services, and engineering, procurement and construction (EPC) services - shifted to the mainboard, gaining access to a broader and more liquid investor base.

Ahead of this migration, promoter ownership of the firm stood at 64.67 per cent in June 2023. There were fewer than 2,700 individual shareholders collectively holding a 24.85 per cent stake at the time. The total number of public shareholders remained under 3,000.